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I wrote a post a little more than five years ago about Variety Reduction Program (VRP), an amazing but little known product design optimization tool. At the time I referred to VRP as an idea whose “time had not yet come.” Last week, as I gave a short presentation on VRP, I realized that five years later its time apparently still has not come. In the interest of creating more interest around this significant technique, the following post expands on my epistle from 2011 and provides a couple of tangible examples of that significance from my own experience.

First, I think the technique deserves a new, mnemonic and alliterative moniker: Profitless Part Proliferation. I suggest this clarification because the word “variety” has an unfortunate positive connotation in the sense of greater customer selection, and therefore turns off sales and marketing folks before you can explain that VRP is not about product line trimming. That was my initial experience in my own company many years ago. “Just another anti-customer maneuver by operations,” I heard. In fact, VRP aka P3 is about trimming needless part variety and all of its associated costs (e.g. drawings, inspection, purchase orders, stocking locations, etc.)

Secondly, I would like to call attention to the false sense of profitability that is often created through the addition of new parts and assemblies. Minimizing the functional cost of material (the one that shows up on variance reports) for a single product looks good on paper, but almost always creates huge overhead costs arising from complexity. Engineers and cost accountants typically focus on the apparent profit from product X, but ignore the resulting system costs. They can’t see the forest for the trees, so to speak. The following two examples for common part commodities, one a purchased part and the other a sub-assembly, speak to this problem:

O-rings. A project was initiated to examine O-ring specifications and dimensions – things like durometer, chemical resistance, temperature range, ID and OD. The first thing we realized was that there was no single repository for this information. Our computer part master record contained dozens of fields to support ordering and costing, but most important design information was squished unintelligibly into a description field. After cataloging specs and dimensions for O-rings, we realized that twenty-nine different O-rings were stocked. Our discoveries:

Our information system made it difficult for designers see what was already available when they were choosing parts. It was just faster and easier to go to a supplier catalog. An alarming amount of part variety arose simply from poor design tools.

Once we were able to view O-rings as a part type from a design standpoint, we realized there was considerable overlap in specs and dimensions. Of the twenty-nine O-rings we cataloged, we determined that all production needs could be handled by only five O-rings.

Of the five remaining O-rings, one had metric dimensions because of unanticipated tolerances with mating parts. Rather than deal with correcting the mating parts, a unique O-ring was selected as a “bushing.” Incidentally, that particular new part required the addition of a new supplier.

The rub was that the most robust O-rings cost a few cents more than marginally acceptable specifications. Cost accountants argued that using the most robust O-rings would increase product cost, ignoring the additional costs of maintaining two-dozen unneeded parts. In fact, as we were a low-volume high-variety producer, we pretty much had to order months of supply for every one of the different O-rings anyway. Finally, engineers argued that the cost of an engineering change – particularly a drawing change – was too great. “We have better things to do” I heard. Fact is, engineers are typically not rewarded for fixing up old parts; they are recognized for designing something new. Ultimately, however, some concessions were made in the interest of experimentation and the O-ring variety was reduced.

Lead wires. A more egregious example of Profitless Part Proliferation was the variety of lead-wire assemblies. As a manufacturer of electro-mechanical products, my company built thousands of different lead-wire assemblies to support perhaps three dozen product families. At one point we dedicated a full bay of ASRS storage to lead-wires. Still, lead-wire assembly stock-outs represented a major cause of late customer deliveries. Lead-wires were cut and terminated in large batches owing to the long set-ups on the machine. While working on set-up reduction of the lead-wire machine, a production team lead astutely wondered why many lead-wires differed by insignificant lengths, as little as 1/32”. During a project launched to catalog the variety in gauges, stranded or solid, terminations, insulation color and material – and many other specs – we did in fact identify an important opportunity just in lead-wire length variety. This variety, we suddenly realized, stemmed from a single statement regarding the length of the connection leads outside the end item enclosure. Sales and technical literature read something like this “Lead-wire length: 12” outside enclosure.” In fact, our customers would have been happy with “at least 12” outside enclosure.” Twelve and one-half inches would have been fine, as would twelve and one-thirty second inches, and so on. The authors of VRP advised us to be clearer regarding which dimensions should be fixed and which could be variable within a range. Once the product specification was changed to reflect “at least 12 inches outside,” the number and type of lead-wire assemblies plummeted! So did the stock-outs.

These are just two of many specific examples where parts proliferation was pointless and profitless. Now, before you say to yourself, “Oh that would never happen in my factory,” I’d encourage you to choose a common commodity of a purchased or manufactured part, and investigate the variety. Please share a story for our readers about your discoveries. (One lucky commenter will be selected to attend GBMP’s 12th annual Northeast L.E.A.N. Conference coming in October to Worcester, MA. I am delighted to reveal our four exceptional Keynote presenters will be: Art Byrne, John Shook, Steven Spear & Dr. Eric Dickson (not to mention the forty other educational, informative, motivational and fun breakout sessions).

Shigeo Shingo was quoted as saying “The worst waste is the waste we cannot see.” Help us to see by sharing an example from your experience. I’d hate to think that I’ll be reflecting again in another five years on an idea whose time still has not yet come.

O.L.D.

BTW: GBMP’s calendar of Shingo Institute workshops is jam packed through October. Check it out here and join us for a workshop (or two) soon.

Also, I’m happy to share that GBMP’s online streaming video subscription service which we launched in March and call Leanflix is receiving terrific reviews. We are so glad that we have been able to provide convenient, low-cost, on-demand video training content to meet the varied and ongoing training needs of so many in our Lean community. If you haven’t checked it out, I hope you will set aside a little time this week to do so.

Many moons ago when I was just getting started on my lean journey, I visited a large automotive supplier to benchmark pull systems. My own factory had started a pilot kanban between two work centers and I was hoping to gain some insight from a more experienced source. To my disappointment, when I was escorted to the factory, the aisles were crowded with pallets of kitted orders. “What is this inventory?” I asked my tour guide. “That’s Kanban,” he said. “How so?” I asked. “Every day the stockroom pulls stock for the floor,” he explained, emphasizing the word “pull.” I thought to myself that this particular material looked just like traditional factory orders, launched before they were needed. The floor of this benchmark facility was more crowded with inventory than my own. Not wishing to be rude, I tactfully inquired, “Isn’t the kanban supposed to stay near to the supplying work center?” The factory manager confidently responded, “Oh yes, we have a central Kanban area. I’ll show you.” With that, he led me to large storage area that looked just like my stockroom only larger. “We pull from here,” he reiterated, once again emphasizing the operative word, “pull.”

“Amazing,” I thought to myself, “the factory has just swapped its STOCKROOM sign with one that reads “KANBAN.” (Thirty years later, by the way, that factory has been closed.) The point here is not to focus specifically on the tool, in this case kanban, but rather to highlight the difficulty that arises when the concept behind any tool is misunderstood. If we don’t understand “what good looks like,” we could be doing exactly the wrong thing.

Two days ago, for example, I heard a machinist jokingly describe his factory’s use of Andons: “When there’s a problem with my machine, I set the Andon to red and that signals everyone that I’m away from the machine hunting for the maintenance department.” Unfortunately, while the front line employee knows this not how Andons are supposed to function, the details are less well understood elsewhere. There is not a single Lean tool I can think of which is not burdened by misconceptions. Here are six common ones. Perhaps you can add to the list in the comments section below and we’ll keep a running tally (think we can get to 50?):

Ganging up shop orders with similar set-ups regardless of due date in order to amortize set-up time, and then calling it “set-up reduction.” This is set-up avoidance. The whole idea of reducing set-ups to “build the customer’s exact order immediately” is lost when orders wait their turn for the right set-up.

Creating dedicated “cells” which sit idle 80% of the time. People tell me, “We don’t have room for cells.” No wonder.

Moving the stockroom to the factory and then referring to months of stock on hand as “point of use inventory.”

Referring to work instructions as “standard work.” In fact, having a clear work standard and job instructions build an important foundation for standardized work but too few sites understand standardized work as a dynamic choreography matching supplier capability to customer rate.

A subset of the above, confusing Takt time with cycle time.

One of my favorite misconceptions came from an engineering manager who let me know that he appreciated the “8th waste” (loss of creativity) because he was tired of his engineers wasting their creativity on production problems.

Confronted by these kinds of mis-perceptions, I’m reminded of an old Twilight Zone episode, Eye of the Beholder. Watch the two-minute clip to see how ugly things can get when we don’t have a good understanding of the concepts behind Lean tools. In the last several years, a great deal of attention has been given to creating a Lean culture rather than just implementing the tools. This is an ideal I subscribe to wholeheartedly so long as we define culture as an environment favorable to continuous improvement, and recognize that a proper understanding of the tools by both workers and managers is a key part of the culture.

O.L.D.

PS I’d be remiss if I didn’t remind folks that the Early Bird price for The 12th Annual Northeast L.E.A.N. Conference – “Lean-By-Doing: Accelerating Continuous Improvement”– ends May 31. It’s a great event and all the better if you can save your company some dough when you register your group. (It’s still a really affordable event even if you wait until the summer to register, no worries.) I am really looking forward to it and hope you are making plans to join us. There will be keynote presentations by John Shook, Steven Spear, Art Byrne & Dr. Eric Dickson, plus more than 30 interactive, educational, inspirational and fun breakout sessions rounded out with networking socials, yokoten in the Lean Lounge and much more. Here’s the agenda. See you in October, I hope!

As an added incentive to add to my kanban misconceptions list, one commenter will receive a free registration for the whole event! Good luck! BEH

There is a popular lore provided by Shigeo Shingo, that the original name for mistake-proofing (Poka-Yoke) was “fool-proofing” (Baka-Yoke). Shingo chided managers at Panasonic for using the latter term, as it was disrespectful to workers, essentially calling them fools. Shingo substituted the word “mistake” for “fool”, because, as he aptly noted, making mistakes is part of humanity. “Mistakes are inevitable,” he said, “but the defects that arise from them are not.”

Notwithstanding Mr. Shingo’s admonitions, however, I still hear the term “fool-proofing” used regularly, and occasionally with a little more venom, “idiot-proofing.” No doubt, these derogatory terms, along with others like ‘screw-up’ and its less gentile derivatives, have given a bad name to one of the most energizing, empowering and creative tools from the TPS toolbox. Many organizations never even get out the blocks with this technique because of an overt insulting, blame environment. Who wants to report a mistake, when the reward is blame and ridicule? Like Mr. T, managers tend to blurt out the wrong words when mistakes occur. Bad habits die hard.

But even for more enlightened managers there are still some common hurdles to creating a really powerful Poka-Yoke system. A few weeks ago I gave a short Webinar for AME on Poka-Yoke, and was asked this question by a viewer:

“How do I ensure the effectiveness in use of the Poka-Yoke device? People usually don’t want to continue using it.”

Here, with a few embellishments, was my response:

“The general answer to this question from today’s Webinar is that if people don’t find a particular tool purposeful, they don’t use it. More specifically for poka-yoke, there are seven reasons that the tool is not seen to purposeful by team members:

Sometimes to assure quality, an additional step is added to the operation to prevent or detect the defect, but this step is not considered in the standardized work, i.e., no additional time is allowed. If the device or method requires an extra step that takes more time (e.g. use of a check list or matching parts to a template) then employees will feel rushed and pressured to choose between rate and quality.

A corollary to the lack of standardized work is the lack of communication to team members, team leaders and managers. An undocumented and untrained standard is not a standard.

If the device or method causes strain to the employee it won’t last. Substituting Muri for Muda is not a good trade off.

For detect-type poka-yoke devices (i.e., a defect is created, but is detected before it can pass to the next operation), the concept involves swarming the defect when it’s trapped in order to understand its root cause. I see many cases where defects are trapped, but there is no follow up. Defects pile up, or they are picked up occasionally by engineering or quality, and no feedback goes back to the production line. When problems don’t get fixed, this promotes cynicism. It’s not poka-yoke, just a scrap sorter.

Sometimes, as suggested in the question above, a device is put in place, but the defect persists. This could mean the device isn’t used by the team member, but it can also mean the device just doesn’t work. More PCDA is needed. If the device doesn’t work, team members will be the first to know. Telling them to use something that doesn’t work is disrespectful and disengaging.

The term Poka-Yoke is used too broadly to describe countermeasures that have nothing to do with human error, but relate more to providing proper tooling and fixturing to team members. For example, if a particular job requires super human sensor capability to complete (more Muri), creating fixturing to make the job doable is not a Poka-Yoke solution. My father, who was a machinist by trade and an artist by avocation, could draw a straight line freehand around an entire room. Most of the rest of us would want a straight edge and a level to complete that task. The point is when we refer to such countermeasures as “mistake-proofing”, we’re once again disrespecting team members.

Most importantly, if the employee who uses the device is not included in the solution, there is typically little commitment to use it, especially if any of points 1 through 6 apply.

That’s the long-winded answer to the short question. The short answer to that question is that the “technical” portion of poka-yoke doesn’t work if it is not grounded by a quality culture.”

Perhaps you can think of some other common mistake-proofing mistakes to share with our readers. Please let me hear from you.

Last week I visited with JVS, a terrific Boston-area organization whose mission “is to empower individuals from diverse communities to find employment and build careers, and to partner with employers to hire, develop, and retain productive workforces.” I was reminded of my first experience with workforce development, one that was detailed in a 1986 edition of TEI Newsletter under the heading ‘A Revolution That Began With a Book.” As I reflect now, I think the heading should have read “A Revolution That Began by Chance,” because the book in question, The Goal, while thought provoking, was only indirectly the trigger of the revolution. Here’s the real story:

In 1986, as I had just been promoted to vice president of manufacturing, a copy of The Goal was serendipitously dropped in my lap by a visiting consultant. I liked the book so much that I ordered four more copies for my managers. They liked it too, mostly because they identified with the fictional plight of the story’s protagonist, Alex Rogo, a poor slob trying unsuccessfully to please the customer. We all felt like Alex.

The next thing I did caused a few persons to question my sanity. I purchased several hundred more copies of The Goal to distribute to every employee in manufacturing. I thought to myself, “Here’s a story that articulates many of the problems we have, and recommends a path out of those problems.” I wrote a short note to employees asking them to read the book and enclosed it with the book in the weekly paychecks. “It’s an easy read,” I thought naively “that will align everyone’s thinking around continuous improvement.” On Thursday afternoon, books and paychecks were distributed.

As left the building on Thursday, I noticed several dozen copies of the book strewn in the parking lot. My first emotions were anger and betrayal. What had I done to deserve this? Didn’t employees want to learn? Didn’t they want to do a better job? I scooped up copies from the parking lot as if I was erasing graffiti, and, like Alex Rogo, went home to stew about my problems.

The next morning I pulled together a quick meeting of managers and supervisors to get their reaction to the book trashing. There were several I-told-you-so’s: “You should’ve known those folks would not read a book.” But Evie, a production supervisor offered diplomatically, “Perhaps you insulted some employees because they can’t speak English.” Suddenly I felt stupid. It should have been obvious to me that communication in our plant was severely limited by lack of a common language. In fact, there were at least seven different languages spoken in our factory. Many factory workers were bi-lingual, but their second language was French, not English.

Shortly thereafter, Evie submitted an employee suggestion that employees in her department be taught English. Our HR manager ran with the idea, identifying an organization like JVS to provide ESOL (English for Speakers of Other Languages) training to any interested non-English speaking employees. He also found state funding to pay for the training. To the surprise of many, fifty employees signed up!

More surprising still was the change in thinking within the factory. The company had invested in people, not just machines. And the ROI was seen in more problem solving, better teamwork and more ideas. The final irony was that the ESOL students were learning Japanese words as well, like Kaizen and Kanban and Poka-Yoke, as part of their English curriculum, in many cases better than our native English-speaking employees.

Are you investing in your employees? The payback is huge. Share a story.

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I am looking for some help to answer this question. Seeking illumination, I recently attended a presentation offered through CCAT, a non-profit Connecticut corporation with a mission not unlike that of GBMP – “to apply innovative tools and practices to increase efficiencies, improve workforce development and boost competitiveness.”

The word optimization was used more times than I could count. One slide in particular from the presentation, entitled “Rapid Manufacturing Scenario,” caught my eye. The speaker described a series of two improvements (noted in the bar charts at the bottom of the slide) using “machining process optimization software tools.” “Hmm,” I thought “interesting stuff: virtual verification of NC code, 3D part scanning and digitization, optimal tool paths, automatic program correction”. But I couldn’t help noticing that as operational times were being slashed, the orange bar – Setup on Machine – stayed the same. In fact, nowhere in the presentation, was there a mention of machine setup improvement.

I wondered, ‘Would this ‘improved ratio’ of setup to runtime cause a machine shop to run fewer parts or more parts?” For a site grounded in Lean, I think the answer would be ‘always work on setup reduction in order to run exactly what is needed for the next process.” In the absence of that grounding however, I worry that the ratio would create more over-production to “optimize’ part cost.

After the presentation, I jumped onto the CCAT website and did find a one-day course on set-up reduction (none scheduled however) and an article on Lean simulation software, not a favorite approach with me. I think the real floor is where the action is, not the virtual floor. Call me old-fashioned.

Investigating a little further, I discovered that the state of New Jersey understands Advanced Manufacturing (AM) to “make use of high-tech processes in their manufacturing plants including installing intelligent production systems such as advanced robotics.” Same thing in Iowa and Georgia and, of course, my home state of Massachusetts. In fact, this AM description appears in pretty much every reference to advanced manufacturing I could find. Ultimately, I landed on the website of NACFAM, a non-profit who describes itself as “the voice of advanced manufacturing in Washington, D.C.” They appear to have offered the authoritative definition of AM, the one that everyone else is parroting:

“The Advanced Manufacturing entity makes extensive use of computer, high precision, and information technologies integrated with a high performance workforce in a production system capable of furnishing a heterogeneous mix of products in small or large volumes with both the efficiency of mass production and the flexibility of custom manufacturing in order to respond quickly to customer demands.”

In June 2011 our national government announced it would spend $500 million to support advanced manufacturing. I hope they understand what it means. I’m still confused. I worry that Advanced Manufacturing sounds an awful (and I mean awful) lot like Lee Iacocca’s “agile manufacturing” strategy (vintage 1990) to leapfrog Toyota’s system. History did not validate this approach; I hope it has not been repackaged for 2012.

I recall a complaint offered by Shigeo Shingo in 1989 that while at that time nobody was paying attention to SMED (Single Minute Exchange of Dies), there were a swarm of doctoral dissertations on algorithms for optimizing economical order quantity (advanced manufacturing?) Have we grown beyond that thinking today, or are we still squirming in quicksand?